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Court: Tyson Information Not Secret

November 17, 2000

LITTLE ROCK, Ark. (AP) _ The state Supreme Court ruled Thursday that Tyson Foods is at fault for not adequately protecting corporate secrets from a major competitor, reversing an earlier ruling which said ConAgra unlawfully acquired Tyson trade secrets from three former Tyson executives it hired.

The information was not secret, the court said, and even if it were, Tyson, the world’s top poultry producer, did little to protect it.

The court’s unanimous decision reversed a Washington County chancellor’s October ruling in favor of Tyson and voided injunctions that the chancellor issued prohibiting ConAgra from employing the former Tyson executives for one year.

Tyson spokesman Ed Nicholson said the company was disappointed by the ruling. ``In today’s economy, intellectual property is of the most important assets of a corporation,″ Nicholson said.

Springdale-based Tyson sued ConAgra last year, accusing the Omaha, Neb.-based company of hiring away its top executives _ Jerry Dowd, Mike Hamblin and John Curran _ to gain Tyson secrets, including pricing, pricing programs, cost of goods sold, profit margins, marketing strategies and Tyson’s poultry feed formula.

Tyson claimed ConAgra saved $70 million by using the formula and asked for that amount in damages.

A jury awarded Tyson $20 million, a day after Chancellor John Lineberger decided that ConAgra acquired the feed formula in violation of Arkansas’ trade secrets act.

Lineberger considered the formula aspect of the case separately. Motions to set aside that verdict are pending. Tyson said Thursday that it did not expect the high court ruling to affect its monetary award.

ConAgra appealed to the Supreme Court, arguing, among other things, that Lineberger erred in finding that trade secrets were involved. ConAgra argued that the information was readily available and that Tyson failed to take reasonable steps to keep it secret. None of the seven customer contracts that Tyson claimed involved trade secrets contained a restriction on those customers to keep pricing information secret, ConAgra said.

``We had faith that the justice system would resolve this matter,″ said ConAgra spokesman Bob McCuen, declining further comment.

Tyson had no covenant with the three executives after they left the company, nor any separate agreement that extended the period of time for confidentiality of certain proprietary information for a year after they left the company, the justice said.

``Obviously, the failure of a business to protect against the disclosure of information it considers to be secret following employment is critical to our analysis and ultimate decision regarding whether the information is in fact a trade secret,″ Brown wrote.

The high court remanded the case to Lineberger’s court for an order voiding the injunctions.

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